On June 8th of this year, the Legislative Assembly of El Salvador approved the Bitcoin Law, the objective of which is to generate employment opportunities for the population and foreign investment, promote financial inclusion and promote economic dynamism.
Said legislation includes the following articles as general provisions:
Art.1. The purpose of the law is to regulate bitcoin as legal tender, unrestricted with liberational power, unlimited in any transaction and in any title that people require to carry out.
Art.2. The exchange rate between Bitcoin and the US dollar will be freely set by the market.
Art.3. All prices may be expressed in bitcoin.
Art.4. Tax contributions may be paid in bitcoin.
Art.5. Exchanges in bitcoin will not be subject to capital gains tax like any legal tender.
Art.6. For accounting purposes, the dollar will be used as the reference currency.
Art.7. Every economic agent must accept bitcoin as a form of payment when it is offered to him by whoever acquires a good or service.
Art.8. Without prejudice to the actions of the private sector, the State will promote alternatives that allow the user to carry out bitcoin transactions, as well as having automatic and instant convertibility of bitcoin to dollars if desired.
Art.9 The limitations and operation of the alternatives for automatic and instantaneous conversion from bitcoin to dollar provided by the State will be specified in the Regulations issued for this purpose.
Art.10. The Executive Branch will create the necessary institutional structure for the purposes of applying this law.
It will enter into force 90 days after its publication in the Official Gazette.